How to Choose Term Insurance Policy in 2021?
Published On Aug 07, 2021 5:00 AM By Kanika Wadhwa
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At the time of selecting a term insurance plan, the foremost thing that generally customers do is to compare the prices. This is because price is an important factor, however, by placing the sole importance on price and by ignoring other major features, it is possible that you might have to compromise with your family’s financial safety. To ensure that your loved ones do not have to face any kind of hurdles in future, here is a list of 5 important things that you must keep in mind while selecting the best term insurance plan for yourself.
Claim Settlement RatioWhile opting for a term insurance plan, one of the major things to take into regards is claim settlement ratio. A company’s claim settlement ratio gives you details regarding the number of plans that are settled by paying the claims back, in the event of death of the policyholder. Generally, an insurer that settles 98-99 claims out of each 100 claims received is considered to be a credible insurance company. This is due to the reason that the rejected claim defeats the entire purpose of purchasing a term insurance plan. Thus, it is suggested to look at the claim settlement ratio of an insurance company prior to purchasing the insurance.
Purchase Insurance Plan OnlineWhile opting for a term insurance plan, deciding whether you would be purchasing the plan offline or online would make a great difference. This is because purchasing insurance plans online via different comparison portals is very beneficial and affordable. You can make comparisons of several insurance products in terms of their different features and cost. No intermediaries are involved in the process and the plans are also quite affordable. On the other hand, purchasing insurance plans offline can be very costly, as there is an involvement of agent and middleman.
Tenure of the Insurance PlanThe duration of a term insurance plan is as important as the coverage amount. It is necessary for a term plan to offer coverage to the policyholder till the age he wishes to work. A few years ago it was limited to 60 years, however, it has now increased as people now want to work even beyond 60 years of age. This is because people nowadays get married late and have children at even a higher age. Therefore, it is certain that an individual would need cover till at least 65 years of age. Moreover, you should consider buying a term insurance plan at a younger age as premium payable then are a little on the lower side. And the higher the age of an individual, the higher the premium payable.
Ensure to Buy Insurance According to Your NeedBe it being a sole breadwinner of the family or making contribution to the collective family income, choose an insurance cover that is equal to the amount of income needed to meet the day to day expenses of your family.
Riders to Maximize Insurance CoverageOther than the death benefit offered by a term insurance plan, some of the insurance plans provide additional coverage in the form of riders. Some of the riders such as loss of employment cover, disability cover, premium waiver cover can be included by paying a small portion of added premium. These riders help in adding a considerable value to the standard term insurance plan purchased.
At the End
A term insurance plan offers adequate coverage at an affordable cost. However, it is, foremost important for you to analyze your needs with regards to money, age, insurance cover and future requirements of your loved ones. You can go through the afore-mentioned points at the time of buying a term insurance plan in order to make the right decision.
Also Read: Steps To Buy Retirement Insurance Plans Online
Should You Buy Term Insurance With Mutual Fund Or ULIP?
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.